Coinbase has called on the U.S. Treasury Department to limit the regulatory reach of the GENIUS Act, warning that overly broad definitions could stifle innovation in the blockchain sector. In its public letter, Coinbase urged the Treasury to exclude developers, validators, and open-source projects from being classified as “brokers” for tax purposes.
The company also proposed recognizing stablecoins as cash equivalents for accounting and taxation — a move that could simplify reporting for both businesses and individual investors.
Coinbase’s position reflects growing concern within the crypto industry that U.S. regulators may impose disproportionate obligations on non-custodial participants, potentially driving development offshore.
Industry advocates argue that precise rulemaking is essential to balance tax compliance with technological freedom. “If we treat code maintainers as financial intermediaries, we risk paralyzing innovation,” one policy expert warned.
The GENIUS Act is part of Washington’s broader push to modernize digital asset oversight following the Infrastructure Act’s controversial tax provisions in 2023.
